Full Press Release Details
| Phone: 770-419-3355 | / Lynn Lewis |
| CryoLife D. Ashley Lee Executive Vice President, Chief Financial Officer and Chief Operating Officer Phone: 770-419-3355 | Gilmartin Group LLC Greg Chodaczek / Lynn Lewis Phone: 646-924-1769 investors@cryolife.com |
CryoLife Reports Second Quarter 2019 Financial Results
Second Quarter and Recent Business Highlights:
both compared to the second quarter of 2018
ATLANTA, GA (July 30, 2019) CryoLife, Inc. (NYSE: CRY), a leading cardiac and vascular surgery company focused on aortic disease, announced today its financial results for the second quarter ended June 30, 2019.
Our second quarter performance marked another period of consistent growth despite headwinds. We also continued to make important progress advancing our clinical pipeline and R&D programs said Pat Mackin, Chairman, President, and Chief Executive Officer. We expect the second half of 2019 to commence the start of a multi-year launch of next generation products into existing and new geographies. This is an exciting time in our history and we are confident we have the right mix of differentiated products supported by our experienced sales organization to take the Company to higher levels of revenue performance.
Second Quarter 2019 Financial Results
Total revenues for the second quarter of 2019 were $71.1 million, reflecting growth of 4%, and 7% on a non-GAAP constant currency basis, both compared to the second quarter of 2018. The non-GAAP increase was driven by revenue growth from BioGlue, On-X, JOTEC, and tissue processing.
Net income for the second quarter of 2019 was $2.8 million, or $0.07 per fully diluted common share, compared to a net income of $226,000, or $0.01 per fully diluted common share for the second quarter of 2018. Non-GAAP net income for the second quarter of 2019 was $4.1 million, or $0.11 per fully diluted common share, compared to non-GAAP net income of $3.9 million, or $0.10 per fully diluted common share for the second quarter of 2018.
2019 Financial Outlook
CryoLife is reiterating its full-year financial guidance, with total revenues for 2019 expected to be in the range of $280 million to $284 million and non-GAAP earnings per share expected to be between $0.28 and $0.32.
All numbers are presented on a GAAP basis except where expressly referenced as non-GAAP. The Company does not provide GAAP income per common share on a forward-looking basis because the Company is unable to predict with reasonable certainty business development and acquisition-related expenses, purchase accounting fair value adjustments, and any unusual gains and losses without unreasonable effort. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP.
The Company's financial guidance for 2019 is subject to the risks identified below.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. Investors should consider this non-GAAP information in addition to, and not as a substitute for, financial measures prepared in accordance with U.S. GAAP. In addition, this non-GAAP financial information may not be the same as similar measures presented by other companies. The Company's non-GAAP net income and non-GAAP EBITDA results exclude (as applicable) business development and integration expenses, amortization expense, inventory basis step-up expense, loss on foreign currency revaluation, and stock-based compensation expense. The Company believes that these non-GAAP presentations provide useful information to investors regarding unusual non-operating transactions; the operating expense structure of the Company's existing and recently acquired operations, without regard to its on-going efforts to acquire additional complementary products and businesses and the transaction and integration expenses incurred in connection with recently acquired and divested product lines; and the operating expense structure excluding fluctuations resulting from foreign currency revaluation and stock-based compensation expense. The Company believes it is useful to exclude certain expenses because such amounts in any specific period may not directly correlate to the underlying performance of its business operations or can vary significantly between periods as a result of factors such as acquisitions, or non-cash expense related to amortization of previously acquired tangible and intangible assets. The Company has excluded the impact of changes in currency exchange from certain revenues to evaluate growth rates on a constant currency basis. The Company does, however, expect to incur similar types of expenses and currency exchange impacts in the future, and this non-GAAP financial information should not be viewed as a statement or indication that these types of expenses will not recur.
Webcast and Conference Call Information
The Company will hold a teleconference call and live webcast later today, July 30, 2019 at 4:30 p.m. EDT to discuss the results followed by a question and answer session. To listen to the live teleconference, please dial 201-689-8261. A replay of the teleconference will be available through August 7, 2019 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The Conference ID for the replay is 13692463.
The live webcast and replay can be accessed by going to the Investor Relations section of the CryoLife website at www.cryolife.com and selecting the heading Webcasts & Presentations.
About CryoLife, Inc.
Headquartered in suburban Atlanta, Georgia, CryoLife is a leader in the manufacturing, processing, and distribution of medical devices and implantable tissues used in cardiac and vascular surgical procedures focused on aortic repair. CryoLife markets and sells products in more than 100 countries worldwide. For additional information about CryoLife, visit our website, www.cryolife.com.
Forward Looking Statements
Statements made in this press release that look forward in time or that express management's beliefs, expectations, or hopes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of management at the time such statements are made. These statements include our belief that we expect the second half of 2019 to commence the start of a multi-year launch of next generation products into existing and new geographies and we have the right mix of differentiated products supported by our experienced sales organization to take the Company to higher levels of revenue performance. These forward-looking statements are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations. These risks and uncertainties include the risk factors detailed in our Securities and Exchange Commission filings, including our Form 10-K for year ended December 31, 2018. CryoLife does not undertake to update its forward-looking statements, whether as a result of new information, future events, or otherwise.
CRYOLIFE, INC. AND SUBSIDIARIES
Financial Highlights
(In thousands, except per share data)
| (Unaudited) | (Unaudited) | ||||||||||
| Three Months Ended | Six Months Ended | ||||||||||
| June 30, | June 30, | ||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||
| Revenues: | |||||||||||
| Products | $ | 51,168 | $ | 49,313 | $ | 99,569 | $ | 92,911 | |||
| Preservation services | 19,971 | 19,183 | 39,075 | 37,533 | |||||||
| Total revenues | 71,139 | 68,496 | 138,644 | 130,444 | |||||||
| Cost of products and preservation services: | |||||||||||
| Products | 14,489 | 13,550 | 28,315 | 27,707 | |||||||
| Preservation services | 9,684 | 9,095 | 19,090 | 17,658 | |||||||
| Total cost of products and preservation services | 24,173 | 22,645 | 47,405 | 45,365 | |||||||
| Gross margin | 46,966 | 45,851 | 91,239 | 85,079 | |||||||
| Operating expenses: | |||||||||||
| General, administrative, and marketing | 34,623 | 34,727 | 71,143 | 72,075 | |||||||
| Research and development | 5,841 | 5,719 | 11,389 | 11,089 | |||||||
| Total operating expenses | 40,464 | 40,446 | 82,532 | 83,164 | |||||||
| Operating income | 6,502 | 5,405 | 8,707 | 1,915 | |||||||
| Interest expense | 3,811 | 4,103 | 7,705 | 7,759 | |||||||
| Interest income | (233) | (30) | (349) | (89) | |||||||
| Other expense, net | 185 | 1,466 | 262 | 1,285 | |||||||
| Income (loss) before income taxes | 2,739 | (134) | 1,089 | (7,040) | |||||||
| Income tax benefit | (93) | (360) | (1,446) | (3,411) | |||||||
| Net income (loss) | $ | 2,832 | $ | 226 | $ | 2,535 | $ | (3,629) | |||
| Income (loss) per common share: | |||||||||||
| Basic | $ | 0.08 | $ | 0.01 | $ | 0.07 | $ | (0.10) | |||
| Diluted | $ | 0.07 | $ | 0.01 | $ | 0.07 | $ | (0.10) | |||
| Weighted-average common shares outstanding: | |||||||||||
| Basic | 37,156 | 36,318 | 36,968 | 36,233 | |||||||
| Diluted | 37,838 | 37,249 | 37,789 | 36,233 |
CRYOLIFE, INC. AND SUBSIDIARIES
Financial Highlights
| (Unaudited) | (Unaudited) | ||||||||||
| Three Months Ended | Six Months Ended | ||||||||||
| June 30, | June 30, | ||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||
| Products: | |||||||||||
| BioGlue | $ | 17,933 | $ | 17,069 | $ | 35,155 | $ | 33,039 | |||
| JOTEC | 17,208 | 17,205 | 33,162 | 31,665 | |||||||
| On-X | 12,410 | 11,888 | 24,141 | 22,197 | |||||||
| CardioGenesis cardiac laser therapy | 1,898 | 1,578 | 3,612 | 2,924 | |||||||
| PerClot | 784 | 968 | 1,834 | 1,940 | |||||||
| PhotoFix | 935 | 605 | 1,665 | 1,146 | |||||||
| Total products | 51,168 | 49,313 | 99,569 | 92,911 | |||||||
| Preservation services: | |||||||||||
| Cardiac tissue | 10,500 | 9,055 | 19,430 | 17,158 | |||||||
| Vascular tissue | 9,471 | 10,128 | 19,645 | 20,375 | |||||||
| Total preservation services | 19,971 | 19,183 | 39,075 | 37,533 | |||||||
| Total revenues | $ | 71,139 | $ | 68,496 | $ | 138,644 | $ | 130,444 | |||
| Revenues: | |||||||||||
| U.S. | $ | 38,239 | $ | 36,719 | $ | 75,563 | $ | 71,607 | |||
| International | 32,900 | 31,777 | 63,081 | 58,837 | |||||||
| Total revenues | $ | 71,139 | $ | 68,496 | $ | 138,644 | $ | 130,444 |
| (Unaudited) | |||||
| June 30, | December 31, | ||||
| 2019 | 2018 | ||||
| Cash, cash equivalents, and restricted securities | $ | 40,255 | $ | 42,236 | |
| Total current assets | 188,557 | 179,168 | |||
| Total assets | 597,123 | 571,091 | |||
| Total current liabilities | 37,468 | 34,523 | |||
| Total liabilities | 314,970 | 296,024 | |||
| Shareholders' equity | 282,153 | 275,067 |
CRYOLIFE, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP
Net Income (Loss) and Diluted Income (Loss) Per Common Share
(In thousands, except per share data)
| (Unaudited) | (Unaudited) | ||||||||||
| Three Months Ended | Six Months Ended | ||||||||||
| June 30, | June 30, | ||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||
| GAAP: | |||||||||||
| Income (loss) before income taxes | $ | 2,739 | $ | (134) | $ | 1,089 | $ | (7,040) | |||
| Income tax benefit | (93) | (360) | (1,446) | (3,411) | |||||||
| Net income (loss) | $ | 2,832 | $ | 226 | $ | 2,535 | $ | (3,629) | |||
| Diluted income (loss) per common share: | $ | 0.07 | $ | 0.01 | $ | 0.07 | $ | (0.10) | |||
| Reconciliation of income (loss) before income | |||||||||||
| taxes, GAAP to adjusted net income, | |||||||||||
| non-GAAP: | |||||||||||
| Income (loss) before income taxes, GAAP | $ | 2,739 | $ | (134) | $ | 1,089 | $ | (7,040) | |||
| Adjustments: | |||||||||||
| Business development and integration expenses | 203 | 1,294 | 1,312 | 5,016 | |||||||
| Amortization expense | 2,557 | 2,753 | 5,136 | 5,488 | |||||||
| Inventory basis step-up expense | -- | 1,237 | -- | 2,743 | |||||||
| Adjusted income before income taxes, | |||||||||||
| non-GAAP | 5,499 | 5,150 | 7,537 | 6,207 | |||||||
| Income tax expense calculated at a | |||||||||||
| pro forma tax rate of 25% | 1,375 | 1,288 | 1,884 | 1,552 | |||||||
| Adjusted net income, non-GAAP | $ | 4,124 | $ | 3,862 | $ | 5,653 | $ | 4,655 | |||
| Reconciliation of diluted income (loss) per | |||||||||||
| common share, GAAP to adjusted diluted income per common share, non-GAAP: | |||||||||||
| Diluted income (loss) per common share, GAAP: | $ | 0.07 | $ | 0.01 | $ | 0.07 | $ | (0.10) | |||
| Adjustments: | |||||||||||
| Business development and integration expenses | -- | 0.03 | 0.03 | 0.13 | |||||||
| Amortization expense | 0.06 | 0.07 | 0.13 | 0.14 | |||||||
| Inventory basis step-up expense | -- | 0.03 | -- | 0.07 | |||||||
| Tax effect of non-GAAP adjustments | -- | (0.03) | (0.03) | (0.08) | |||||||
| Effect of 25% pro forma tax rate | (0.02) | (0.01) | (0.05) | (0.04) | |||||||
| Adjusted diluted income per common share, | |||||||||||
| non-GAAP: | $ | 0.11 | $ | 0.10 | $ | 0.15 | $ | 0.12 | |||
| Diluted weighted-average common | |||||||||||
| shares outstanding | 37,838 | 37,249 | 37,789 | 37,152 |
CRYOLIFE, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP
(In thousands, except per share data)
| (Unaudited) | (Unaudited) | ||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||
| June 30, | June 30, | ||||||||||||
| 2019 | 2018 | Growth Rate | 2019 | 2018 | Growth Rate | ||||||||
| Reconciliation of total revenues, GAAP to | |||||||||||||
| total revenues, non-GAAP: | |||||||||||||
| Total revenues, GAAP | $ | 71,139 | $ | 68,496 | 4% | $ | 138,644 | $ | 130,444 | 6% | |||
| Impact of changes in currency exchange | -- | (1,738) | -- | (3,074) | |||||||||
| Total constant currency revenues, non-GAAP | $ | 71,139 | $ | 66,758 | 7% | $ | 138,644 | $ | 127,370 | 9% | |||
| Reconciliation of total BioGlue revenues, GAAP to | |||||||||||||
| total BioGlue revenues, non-GAAP: | |||||||||||||
| Total BioGlue revenues, GAAP | $ | 17,933 | $ | 17,069 | 5% | $ | 35,155 | $ | 33,039 | 6% | |||
| Impact of changes in currency exchange | -- | (295) | -- | (517) | |||||||||
| Total constant currency BioGlue revenues, non-GAAP | $ | 17,933 | $ | 16,774 | 7% | $ | 35,155 | $ | 32,522 | 8% | |||
| Reconciliation of total On-X revenues, GAAP to | |||||||||||||
| total On-X revenues, non-GAAP: | |||||||||||||
| Total On-X revenues, GAAP | $ | 12,410 | $ | 11,888 | 4% | $ | 24,141 | $ | 22,197 | 9% | |||
| Impact of changes in currency exchange | -- | (91) | -- | (168) | |||||||||
| Total constant currency On-X revenues, non-GAAP | $ | 12,410 | $ | 11,797 | 5% | $ | 24,141 | $ | 22,029 | 10% | |||
| Reconciliation of total JOTEC revenues, GAAP, to | |||||||||||||
| total JOTEC revenues, non-GAAP: | |||||||||||||
| Total JOTEC revenues, GAAP | $ | 17,208 | $ | 17,205 | 0% | $ | 33,162 | $ | 31,665 | 5% | |||
| Impact of changes in currency exchange | -- | (1,299) | -- | (2,284) | |||||||||
| Total constant currency JOTEC revenues, non-GAAP | $ | 17,208 | $ | 15,906 | 8% | $ | 33,162 | $ | 29,381 | 13% |
CRYOLIFE, INC. AND SUBSIDIARIES
Reconciliation of GAAP to Non-GAAP
(In thousands, except per share data)
| (Unaudited) | (Unaudited) | |||||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2019 | 2018 | 2019 | 2018 | |||||||||
| Reconciliation of net income (loss), GAAP | ||||||||||||
| to adjusted EBITDA, non-GAAP: | ||||||||||||
| Net income (loss), GAAP | $ | 2,832 | $ | 226 | $ | 2,535 | $ | (3,629) | ||||
| Adjustments: | ||||||||||||
| Depreciation and amortization expense | 4,381 | 4,730 | 8,731 | 9,106 | ||||||||
| Income tax benefit | (93) | (360) | (1,446) | (3,411) | ||||||||
| Interest income | (233) | (30) | (349) | (89) | ||||||||
| Interest expense | 3,811 | 4,103 | 7,705 | 7,759 | ||||||||
| Inventory basis step-up expense | -- | 1,237 | -- | 2,743 | ||||||||
| Business development and integration expenses | 203 | 1,294 | 1,312 | 5,016 | ||||||||
| Loss on foreign currency revaluation | 176 | 1,477 | 250 | 1,458 | ||||||||
| Stock-based compensation expense | 2,266 | 1,872 | 4,119 | 3,120 | ||||||||
| Adjusted EBITDA, non-GAAP | $ | 13,343 | $ | 14,549 | $ | 22,857 | $ | 22,073 |